Finances throughout the world are moving away from cash. All paths into the future lean increasingly digital. But there are two branches along which things could develop which on the surface look similar but are fundamentally different.

When I was a kid, I often used physical money, bills and coins. I used to sort them by denominations, using them as a basis for understanding simple concepts of math. Then my parents got me a passbook savings account, in which I now could have money stored in a local bank account with paper records of my transactions and balances. Years later, after smartphones went mainstream, banks became primarily online, and while some big banks retain physical branches there are many banks or bank-like financial apps which lack any physical presence. Today I hardly ever carry or use cash, relying mostly on electronic funds transfers between bank accounts or through credit and debit cards.

Banks are a centralized implementation of financial infrastructure. This centralization lends itself to systems of control, vulnerabilities to hackers, and concentration of wealth and power in a relatively small number of corporations built solely around the business not merely of holding deposits but leveraging those deposits as collateral for issuing loans and betting on market derivatives. Such leveraging led to the housing bubble crisis of 2008 which sparked the Great Recession, and not much has changed since then.

Crypto came into the world with the launch of Bitcoin that same year. Bitcoin was decidedly different from the fiat currency systems around the world in that crypto is decentralized, using a distributed ledger shared across all nodes rather than managed by a central authority. Complex, math-driven processes of reaching consensus are used to validate transactions and issue more coins. Opening a crypto wallet, particular those which are self custody only, is quite easy and relies on no process of permission or establishment of identity. The vision was that people could start to transact Bitcoin in a fairly anonymous fashion much like how physical cash in anonymous, except Bitcoin could be transmitted between wallets across the internet throughout the world. Bypassing the traditional financial system often results in faster speeds and lower fees for transferring funds.

Then there’s another technology coming into attention in many governments around the world called CBDC - central bank digital currency. How it’s transacted is rather similar to crypto, but how it’s set up is totally different. Each CBDC relies on a digital ID, and often biometrics such as one’s hand print, iris scan, or face are used as the authentication, far from anonymous. Paired with governments’ direct visibility into all transactions under such a system, and tying this to other activities of the individual allows them unprecedented ability to monitor who is buying what when, and also ability to influence if not control this. For example, the government could program CBDC to expire after a certain amount of time, or to be unusable with certain companies or individuals. If recognized by public cameras such as those in China as a protester, seen to be speaking out against currently policies online, or determined by location tracking heuristics to be possibly conducting shady activities, funds could be frozen immediately, restricting one’s ability to participate in the economy.

Already in the US, it’s not hard for the government to impose on a bank the freezing of one’s funds, but typically some type of court order is required to get this done. Under a CBDC, consequences for perceived misbehavior could be swift, possibly even automated in some cases. Maybe you think you never do anything suspicious, but policy and focus of governments can change, especially in a country like the US where we have frequent elections.

It’s quite possible that in the future these two systems will be in conflict for dominance in society. Crypto standing for individual freedom and CBDCs standing for draconian economic control of us all. So consider which side of that conflict you want to be on, and if like me you favor the path of more individual freedom take steps to start embracing that path now:

• When you pay or loan money to friends, do it with crypto

• When you pay your kids’ allowance, do it with crypto

• When you’re looking for ways to pay for things online, do it with crypto

• When you’re deciding where to tuck away savings, do it with crypto (staked at a nice APY)

Systems of exchange benefit exponentially from the scale of network participants. That’s exactly why bank-agnostic P2P transfer apps like CashApp and Venmo have flourished. The same principle applies to crypto; the more people who use it, the more useful crypto itself becomes.

If you’d like to support me with donations you can do so through any of the following addresses:

ETH (Ethereum)

0xd648037E2ff2A2C83A3fe798a77b44AC49C02496

ATOM (Cosmos)

cosmos1y7hh4q7awe85ktgnqkkdsf4vm2k97feqhvtyq8

INJ (Injective)

inj16eyqxl30723vsw3lu7v2w76y43yuqfykqnlv2c

SOL (Solana)

D6Ni3o98XKnwyrNvWUMZePYJwTBbfehBNzK7DNNxsKYV

KAVA (Kava)

kava1fxa5p60qkuppzta37t4g9d5pqg74vr06h3vqf0

XTZ (Tezos)

tz1ZWmVNvMkgbL9ANxYhY2MZqS45cxiE47b6

ADA (Cardano)

addr1q84wg3ecqmuky8tvjjjh8s9mvckqswuyqnjrfsl777lj38h2u3rnsphevgwke999w0qtke3vpqacgp8yxnplaaal9z0qxdlw8a

MATIC (Polygon)

0xd648037E2ff2A2C83A3fe798a77b44AC49C02496

BTC (Bitcoin)

bc1qyrrv7s9hqt06f5sd0c0rlym3a7t9cq53cfzkq7

XRP (XRP)

rpQAh2Adot6bKrAX5a3VJisXBswwWtb9K9

BNB (BNB)

0xd648037E2ff2A2C83A3fe798a77b44AC49C02496

TRX (Tron)

TLu4pimQCcwgRDbBCsai2wdxFPYahx9Zvq

DOGE (Dogecoin)

D8HtTRLTBxmVxuHAgY7zEgQGvSDsz6eoEE

AVAX (Avalanche)

0xd648037E2ff2A2C83A3fe798a77b44AC49C02496

DOT (Polkadot)

16XyGQ4PZaU2LfXakEPF8xV12bxhtQTJdmRcjUY2gs68XYtM

LTC (Litecoin)

LX4B8Yah5BGnEum8vUDVB7iMytnncVkGT1

PEPE (Pepe)

0xd648037E2ff2A2C83A3fe798a77b44AC49C02496

AXL (Axelar)

axelar1y7hh4q7awe85ktgnqkkdsf4vm2k97feqnzavtx

LINK (Chainlink)

0xd648037E2ff2A2C83A3fe798a77b44AC49C02496

XLM (Stellar)

GCYGZUYRMZFXZ6NR4QQHB73VXSQLLOPIFN2JMEZ7FDJ247SHUGHDUCZE

SHIB (Shiba Inu)

0xd648037E2ff2A2C83A3fe798a77b44AC49C02496

BCH (Bitcoin Cash)

qpraqn435v3tx28mrr2lfe6kzn9wge9nfvnzgqdvp2

UNI (Uniswap)

0xd648037E2ff2A2C83A3fe798a77b44AC49C02496

AAVE (Aave)

0xd648037E2ff2A2C83A3fe798a77b44AC49C02496

ETC (Ethereum Classic)

0xDa62a8b38D1E2097452Ac55c306FD383006d06D2

QNT (Quant)

0xd648037E2ff2A2C83A3fe798a77b44AC49C02496

BONK (Bonk)

D6Ni3o98XKnwyrNvWUMZePYJwTBbfehBNzK7DNNxsKYV

Finances throughout the world are moving away from cash. All paths into the future lean increasingly digital. But there are two branches along which things could develop which on the surface look similar but are fundamentally different.

When I was a kid, I often used physical money, bills and coins. I used to sort them by denominations, using them as a basis for understanding simple concepts of math. Then my parents got me a passbook savings account, in which I now could have money stored in a local bank account with paper records of my transactions and balances. Years later, after smartphones went mainstream, banks became primarily online, and while some big banks retain physical branches there are many banks or bank-like financial apps which lack any physical presence. Today I hardly ever carry or use cash, relying mostly on electronic funds transfers between bank accounts or through credit and debit cards.

Banks are a centralized implementation of financial infrastructure. This centralization lends itself to systems of control, vulnerabilities to hackers, and concentration of wealth and power in a relatively small number of corporations built solely around the business not merely of holding deposits but leveraging those deposits as collateral for issuing loans and betting on market derivatives. Such leveraging led to the housing bubble crisis of 2008 which sparked the Great Recession, and not much has changed since then.

Crypto came into the world with the launch of Bitcoin that same year. Bitcoin was decidedly different from the fiat currency systems around the world in that crypto is decentralized, using a distributed ledger shared across all nodes rather than managed by a central authority. Complex, math-driven processes of reaching consensus are used to validate transactions and issue more coins. Opening a crypto wallet, particular those which are self custody only, is quite easy and relies on no process of permission or establishment of identity. The vision was that people could start to transact Bitcoin in a fairly anonymous fashion much like how physical cash in anonymous, except Bitcoin could be transmitted between wallets across the internet throughout the world. Bypassing the traditional financial system often results in faster speeds and lower fees for transferring funds.

Then there’s another technology coming into attention in many governments around the world called CBDC - central bank digital currency. How it’s transacted is rather similar to crypto, but how it’s set up is totally different. Each CBDC relies on a digital ID, and often biometrics such as one’s hand print, iris scan, or face are used as the authentication, far from anonymous. Paired with governments’ direct visibility into all transactions under such a system, and tying this to other activities of the individual allows them unprecedented ability to monitor who is buying what when, and also ability to influence if not control this. For example, the government could program CBDC to expire after a certain amount of time, or to be unusable with certain companies or individuals. If recognized by public cameras such as those in China as a protester, seen to be speaking out against currently policies online, or determined by location tracking heuristics to be possibly conducting shady activities, funds could be frozen immediately, restricting one’s ability to participate in the economy.

Already in the US, it’s not hard for the government to impose on a bank the freezing of one’s funds, but typically some type of court order is required to get this done. Under a CBDC, consequences for perceived misbehavior could be swift, possibly even automated in some cases. Maybe you think you never do anything suspicious, but policy and focus of governments can change, especially in a country like the US where we have frequent elections.

It’s quite possible that in the future these two systems will be in conflict for dominance in society. Crypto standing for individual freedom and CBDCs standing for draconian economic control of us all. So consider which side of that conflict you want to be on, and if like me you favor the path of more individual freedom take steps to start embracing that path now:

• When you pay or loan money to friends, do it with crypto

• When you pay your kids’ allowance, do it with crypto

• When you’re looking for ways to pay for things online, do it with crypto

• When you’re deciding where to tuck away savings, do it with crypto (staked at a nice APY)

Systems of exchange benefit exponentially from the scale of network participants. That’s exactly why bank-agnostic P2P transfer apps like CashApp and Venmo have flourished. The same principle applies to crypto; the more people who use it, the more useful crypto itself becomes.

If you’d like to support me with donations you can do so through any of the following addresses:

ETH (Ethereum)

0xd648037E2ff2A2C83A3fe798a77b44AC49C02496

ATOM (Cosmos)

cosmos1y7hh4q7awe85ktgnqkkdsf4vm2k97feqhvtyq8

INJ (Injective)

inj16eyqxl30723vsw3lu7v2w76y43yuqfykqnlv2c

SOL (Solana)

D6Ni3o98XKnwyrNvWUMZePYJwTBbfehBNzK7DNNxsKYV

KAVA (Kava)

kava1fxa5p60qkuppzta37t4g9d5pqg74vr06h3vqf0

XTZ (Tezos)

tz1ZWmVNvMkgbL9ANxYhY2MZqS45cxiE47b6

ADA (Cardano)

addr1q84wg3ecqmuky8tvjjjh8s9mvckqswuyqnjrfsl777lj38h2u3rnsphevgwke999w0qtke3vpqacgp8yxnplaaal9z0qxdlw8a

MATIC (Polygon)

0xd648037E2ff2A2C83A3fe798a77b44AC49C02496

BTC (Bitcoin)

bc1qyrrv7s9hqt06f5sd0c0rlym3a7t9cq53cfzkq7

XRP (XRP)

rpQAh2Adot6bKrAX5a3VJisXBswwWtb9K9

BNB (BNB)

0xd648037E2ff2A2C83A3fe798a77b44AC49C02496

TRX (Tron)

TLu4pimQCcwgRDbBCsai2wdxFPYahx9Zvq

DOGE (Dogecoin)

D8HtTRLTBxmVxuHAgY7zEgQGvSDsz6eoEE

AVAX (Avalanche)

0xd648037E2ff2A2C83A3fe798a77b44AC49C02496

DOT (Polkadot)

16XyGQ4PZaU2LfXakEPF8xV12bxhtQTJdmRcjUY2gs68XYtM

LTC (Litecoin)

LX4B8Yah5BGnEum8vUDVB7iMytnncVkGT1

PEPE (Pepe)

0xd648037E2ff2A2C83A3fe798a77b44AC49C02496

AXL (Axelar)

axelar1y7hh4q7awe85ktgnqkkdsf4vm2k97feqnzavtx

LINK (Chainlink)

0xd648037E2ff2A2C83A3fe798a77b44AC49C02496

XLM (Stellar)

GCYGZUYRMZFXZ6NR4QQHB73VXSQLLOPIFN2JMEZ7FDJ247SHUGHDUCZE

SHIB (Shiba Inu)

0xd648037E2ff2A2C83A3fe798a77b44AC49C02496

BCH (Bitcoin Cash)

qpraqn435v3tx28mrr2lfe6kzn9wge9nfvnzgqdvp2

UNI (Uniswap)

0xd648037E2ff2A2C83A3fe798a77b44AC49C02496

AAVE (Aave)

0xd648037E2ff2A2C83A3fe798a77b44AC49C02496

ETC (Ethereum Classic)

0xDa62a8b38D1E2097452Ac55c306FD383006d06D2

QNT (Quant)

0xd648037E2ff2A2C83A3fe798a77b44AC49C02496

BONK (Bonk)

D6Ni3o98XKnwyrNvWUMZePYJwTBbfehBNzK7DNNxsKYV